It's time to start digging up those Squirrelled Nuts!!!!

QrizB

Sea_Shell said:

OMG!!!!!    😲😲😲😲😲

You're a phenomenon, it seems

cfw1994

ex-pat_scot said:

sheslookinhot said:

ex-pat_scot said:

MallyGirl said:

We are also not particularly thinking about inheritance tax - with just one child she will get a lot anyway even if there has been tax deducted. We are planning on living a good few years and have a full set of parents still doing well (some good for age in 80s and some just fit as a fiddle) so we will support her but prioritise ourselves for a while.
I will be withdrawing just under the 20% threshold from DC then adjusting for the tiny DB that starts at 60, OH will be doing some LTA management and taking just under the 40% threshold. What we don't spend (if any) will go into ISAs, PBs and savings accounts.

Sensible.

In general principle, there is a balance between the desire to retain funds in pension wrapper until required, from IHT perspective, set against the desire to minimise LTA impact (particularly the age 75 BCE).
I haven't researched in detail yet, but the broad plan is to deplete up to top of BR tax each year, from 55, and use any surplus in ISA / PB / offset mortgage (if not paid off).

It's important to be aware of the broad tax implications of the strategy, but not get too wound up in the detail and end up having the tax tail wag the dog.

Can you provide some explanation please as to what to be aware of ? Cheers

Simplistically - this is not my area of expertise, and I'm not immersed in the detail as I'm not quite old enough for it to be relevant.

1. Inheritance tax.  
DC funds uncrystallised are outside your estate for IHT purposes.
If you have property and other assets, then you might hit IHT thresholds, and therefore from an IHT perspective it might be preferential to leave DC funds alone.

Just one point to add….you mention uncrystallised funds….I think that is regardless of crystallised or not:

• On death before age 75 the benefits can be paid as a lump sum or as a drawdown pension to any beneficiary tax-free, irrespective of whether they derived from uncrystallised or crystallised monies.
• On death after age 75 the benefits can be drawn down or paid as a lump sum taxed at the beneficiary’s marginal rate.

From here….think it still applies.

cfw1994

Staffordia said:

Sea_Shell said:

In spending news...just treated myself to a pair of North Face walking shoes.

Usual price £115, but £75 in the Blacks sale!! 😁


I have proper boots, but wanted something more lightweight, but still waterproof, for trails.

My how reckless  ,  I hope @cfw1994 approves of you purchasing at sale prices 

I always approve of bargain hiking, biking and tech purchases 🤪
(sorry, been offline, out finally having a bit of a leaving bash in London….a cracking evening with many great pals!)

ex-pat_scot

cfw1994 said:

ex-pat_scot said:

sheslookinhot said:

ex- Cheers

Simplistically - this is not my area of expertise, and I'm not immersed in the detail as I'm not quite old enough for it to be relevant.

1. Inheritance tax.  
DC funds uncrystallised are outside your estate for IHT purposes.
If you have property and other assets, then you might hit IHT thresholds, and therefore from an IHT perspective it might be preferential to leave DC funds alone.

Just one point to add….you mention uncrystallised funds….I think that is regardless of crystallised or not:

• On death before age 75 the benefits can be paid as a lump sum or as a drawdown pension to any beneficiary tax-free, irrespective of whether they derived from uncrystallised or crystallised monies.
• On death after age 75 the benefits can be drawn down or paid as a lump sum taxed at the beneficiary’s marginal rate.

From here….think it still applies.

As I said - not my area of expertise (yet!). I'm sure you are right.

I'm a couple of years away from pension access, and over 20 years away from BCE75.
I have a broad image of the headline principles at the moment, and expect to delve into the detail as I firm up my own decumulation approach at 55.

I too love a bargain, much to my family's despair. Outdoor kit, last year's model trainers, many cycling purchases...

OldScientist

Sea_Shell said:

OldScientist said:

BarbaraG2000 said:

We will be taking a monthly amount from the S&S ISAs.  Never considered making an annual withdrawal….. would you be more subject to volatility if you did that, and there happened to be a market fall when you needed to take your year’s money out, whereas a monthly withdrawal averages it out?

An interesting article on how the frequency of withdrawal affects portfolio survival at https://thepoorswiss.com/how-often-withdraw-portfolio/

For longer retirements (30 years plus) it looks like more frequent withdrawals (in the absence of transaction costs) is better

Does that still apply though, if your "long" retirement is going to be pretty much 100% funded by DB and SP after 10-15 years in??   

Surely if one is only talking about the "short term" plan for getting your money out, it makes less difference whether this is monthly or annually.


*not withstanding any implications to IHT of doing it that way.

Probably not - the figures presented by the PoorSwiss indicate that it doesn't make much (any?) difference in 'short' retirements. It appears these sorts of things (like the perennial arguments over rebalancing frequency etc.) only make relatively small differences for 'normal' retirements (optimisation is probably somewhat more important for those retiring in their 30s or 40s or for those whose DB or SP income is a small fraction of their desired spending).

FWIW we are going with monthly withdrawals for OH's (no transaction fees at Vanguard) and semi-annually for mine (£5 per transaction with iweb) - when we actually make any withdrawals for spending (currently our DB income exceeds our required spending including living legacy payments to offspring).

Sea_Shell

DH is now officially a "pensioner" having just received his first ever payment from a pension.

Maybe I should buy him some new slippers!!! 

cfw1994

Sea_Shell said:

DH is now officially a "pensioner" having just received his first ever payment from a pension.

Maybe I should buy him some new slippers!!! 

Does this mean I beat him by 2 working days?   Got my slippers first payment on Friday 👴
🤪

Congrats to him (& you!)

Sea_Shell

cfw1994 said:

Sea_Shell said:

DH is now officially a "pensioner" having just received his first ever payment from a pension.

Maybe I should buy him some new slippers!!! 

Does this mean I beat him by 2 working days?   Got my slippers first payment on Friday 👴
🤪

Congrats to him (& you!)

Congrats to you too.

Well, DH actually finished work and "retired" in August 2015, so he's been without any income since then.

It's only now, having turned 55 that he's been able to access "real" pension money.



So we've moved some more nuts around and put £15k of the pension pay-out into his ISA, and will do the same with the tax rebate once it comes through (should be about £4200)

That should be the end of any shuffling until next April, and the new tax year.

So as it stands we're at (in round figures)...

DH's remaining DC pensions  - £185,700
My DC pensions - £179,500
ISAs - £215,500
Premium Bonds - £40,000 
Cash - £19,300 (including the tax rebate due)

This gives us an overall asset split of ....
Equity - 61%
Cash - 10%
Other - 29%

If the 61% of Equity returned us 4% growth, that'd be £15,600 on it's own.

jimi_man

Sea_Shell said:

DH is now officially a "pensioner" having just received his first ever payment from a pension.

Maybe I should buy him some new slippers!!! 

I was lucky enough to start my pension at 51 and the feeling you get from the pension dropping into the bank account every month without fail, despite doing absolutely nothing for it and knowing that it will carry on even if you live till 110, is just tremendous. 

Sea_Shell

jimi_man said:

Sea_Shell said:

DH is now officially a "pensioner" having just received his first ever payment from a pension.

Maybe I should buy him some new slippers!!! 

I was lucky enough to start my pension at 51 and the feeling you get from the pension dropping into the bank account every month without fail, despite doing absolutely nothing for it and knowing that it will carry on even if you live till 110, is just tremendous. 

We don't have quite that warm and fuzzy feeling just yet, as he won't get any DB pensions for another 10 years.